Stanford Social Innovation Review

Stanford Social Innovation Review is an award-winning magazine covering best strategies for nonprofits, foundations, and socially responsible businesses. Published quarterly by the Stanford Graduate School of Business.

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Research: When Swag Backfires

Embroidered T-shirts, discounted tickets, exclusive concerts, and other charity carrots can sometimes rouse people to donate more time and money to nonprofits. But incentives can also stifle giving, finds Dan Ariely, a professor of behavioral economics at Duke University’s Fuqua School of Business and author of Predictably Irrational. With his colleagues, Ariely shows that when donors’ gifts are public, nonprofits need not gild the lily by offering trinkets—social approbation is reward enough. But when gifts are private, nonprofits should use loot to inspire even greater generosity.

“Part of the reason we give is so that others will think better of…

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